Six Flags says there is 'substantial doubt' the chain will survive
By Robert Niles
Published: March 11, 2009 at 8:24 PM
Six Flags today told the U.S. Securities and Exchange Commission, in essence, if we can't restructure our debt before we have to make more than $300 million in payments this summer, we're going bankrupt.
Here are the notable quotes from Six Flags' most recent 10-Q statement
, filed on the SEC website:
We have had a history of net losses. Our net losses are principally attributable to insufficient revenue to cover our relatively high percentage of fixed costs, including the interest costs on our debt and our depreciation expense. We also have an accumulated stockholders' deficit of $443.8 million at December 31, 2008. Additionally, our Preferred Income Equity Redeemable Shares ("PIERS") are required to be redeemed in August 2009, at which time we are required to redeem all of the PIERS for cash at 100% of the liquidation preference ($287.5 million), plus accrued and unpaid dividends ($31.3 million assuming dividends are accrued and not paid through the mandatory redemption date). Given the current negative conditions in the economy generally and the credit markets in particular, there is substantial uncertainty that we will be able to effect a refinancing of our debt on or prior to maturity or the PIERS prior to their mandatory redemption date on August 15, 2009.
...Accordingly, we have stated in our financial statements included herein that there is substantial doubt about our ability to continue as a going concern unless a successful restructuring occurs. ...We may be compelled to seek an in-court solution in the form of a pre-packaged or pre-arranged filing under Title 11 of the United States Code, 11 U.S.C. §§ 101, et seq., as amended ("Chapter 11") if we are unable to successfully negotiate a timely out-of-court restructuring agreement with the PIERS holders, common stockholders and our creditors.
In English, that means bankruptcy. 'Cause at this point, with all the nation's major banks essentially insolvent, Six Flags has about as much chance of refinancing as you do winning one of those big stuffed animals with a single coin toss on a Six Flags midway. Scratch that, your chances of landing the four-foot Tweety Bird are better.